Who Pays For Storm Damage During A Settlement?
Every now and again, Brisbane gets hit with golf ball sized hail stones, wild winds and what could be described as total carnage if you get caught up in one of these summer storms.
A few years ago, I was unlucky enough to be caught in peak hour traffic when a storm like the one I've described above hit. Yep, another insurance claim on the old 350z.
I would later discover that in this same storm, a number of my recently purchased homes were damaged by the hail.
But in the aftermath when the damage can be assessed, the question on the minds of buyers and sellers midway through a contract settlement is undoubtedly, who is paying for all of this to be repaired?
Interesting question! And I bet it's one you haven't even thought about.
Queensland Contract Law states that a property becomes at the risk OF THE BUYER within 24 hours of a Legal Contract being entered into between the parties.
THIS MAY VARY IN OTHER STATES, BUT THE POINT I'M MAKING IS THAT AS A BUYER, YOU NEED TO KNOW WHERE YOU STAND.
ESSENTIALLY IF YOU'RE BUYING IN QUEENSLAND, YOU ARE RESPONSIBLE FROM THE MOMENT YOU ENTER INTO A CONTRACT.
It is therefore crucial that Buyers arrange adequate insurance the moment they sign a Contract.
Not when the property settles and not when it becomes unconditional – when the Contract is signed by both Buyer and Seller.
IN SAYING THIS, I KNOW THAT MANY PROFESSIONALS WILL ARGUE THAT STORM DAMAGE IS A “GREY AREA”.
A couple I recently worked with were caught in the middle of this scenario and to their unexpected delight, it was the Seller who made a claim under their insurance policy to have the damaged windows and roof repaired.
This however is not always the case and Buyers need to be diligent when protecting their interests especially during storm season when the heavens can open at any time.
AS A BUYER, DON’T BE CAUGHT OUT HERE.
FIND OUT WHERE YOU STAND BEFORE ENTERING INTO A CONTRACT.
Yes it may be a grey area but are you really going to take the risk?
Get the property insured straight away because as unlikely as it is for something to happen midway through a settlement, there is always the chance.
It’s called Murphy’s Law.